US agency kept financing state-owned Pemex even as more than 190 Pemex workers and contractors have died in fires, explosions and collapses since 2009

A fire in September on this tanker belonging to Pemex caused no injuries, but since 2009 more than 190 workers and contractors have died as a result of fires, explosions and rig collapses.
Photograph: Eduardo Murillo/AFP/Getty Images

Fires, explosions and collapsing offshore rigs have cost the lives of more than 190 workers at facilities run by Mexico’s state-owned oil company since 2009.

Yet American taxpayers have backed loans to the company worth more than $8.5bn during the Obama years, through an obscure agency which has quietly spoiled the president’s record on climate change.

Since January 2009, the US Export-Import Bank has signed almost $34bn worth of low-interest loans and guarantees to companies and foreign governments to build, expand and promote fossil fuel projects abroad.

However, one company benefited more than any other. The Mexican state-owned oil company, Petróleos Mexicanos, or Pemex, has collected more than $8.5bn in taxpayer-backed loans and guarantees from the Ex-Im Bank.

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During this period, more than 190 Pemex workers and contractors have died and more than 570 were injured as a result of fires, explosions and offshore rig collapses, according to data compiled by Columbia University’s Graduate School of Journalism’s Energy and Environmental Reporting Project and Guardian US.

The Mexican oil company has also suffered at least 31 major accidents since 2009 involving fatalities, injuries or environmental destruction and contamination – including a 2013 gas explosion in the company’s Mexico City headquarters that killed 37, a 2015 pipeline leak that contaminated three rivers and polluted the drinking water for half a million people, and a 2013 chemical pipeline leak that caused the evacuation of more than 1,000 people.

Yet despite this questionable track record and an injury rate that has consistently surpassed global standards, the Export-Import Bank has provided an average of more than $1bn a year to Pemex in loans and guarantees.

“There’s a history of problems [with Pemex] and yet along comes the US Export-Import Bank, who provides financing,” said Karyn Keenan, director of Above Ground, an Ottawa-based human rights organization that is investigates overseas companies and treatment of foreign workers. “You’d think these are things that are in the public domain, and would cause [the bank] to do heightened due diligence.”

More than a quarter of all fossil fuel financing by the bank since 2009 has been directed toward Pemex, including a $1.3bn guarantee in 2015 for Pemex to purchase services from Houston-based Diamond Offshore, an offshore rig contractor; and a $1.3bn guarantee in 2013 that was to support the work of San Diego-based Solar Turbines Inc, which builds industrial-size gas turbines and compressors, and the UK-headquartered Noble Corporation, which builds offshore rigs.

Seven workers died on 1 April 2015 and another 45 were injured when, at 4.30am, an oil rig off the coast of the Yucatán peninsula erupted in flames. It took 16 hours, 36 vessels and 57 helicopters to extinguish the blaze. The incident on the Pemex-operated Abkatún-Alpha platform cost the oil company $825m, according to insurance reports.

Thirty-four days later, another Pemex offshore rig collapsed, killing two and injuring 10. And just seven weeks after that, on 22 June, a third offshore rig ignited after an oil and gas leak; in this case, no one was killed or injured.

Yet on 25 June, after this run of accidents, the Export-Import Bank renewed its annual financing of Pemex operations – this time for $1.5bn in US taxpayer-backed guarantees, which included support for the deadly complex where the Abkatún rig had burned, according to the bank’s environmental status reports.

That rig burned again eight months later, in February 2016, when a compression unit on the platform ignited, killing three and injuring eight.

“Each month we have even more uncertainty,” he said. “There are mortal consequences.”

Oil extraction is a dangerous industry. In the US, the industry’s fatality rate is seven times higher than for workers in general.

But in Mexico – where Pemex accounts for more than 95% of the country’s oil operations – the statistics are even worse. According to the International Association for Oil and Gas Producers, an industry-backed group, Mexico has ranked consistently worse than the international standard for injury and fatality rates.

In 2012, government and news accounts indicate there were at least eight accidents, including gas plant explosions and refinery fires, that killed 31 and injured 52. According to the oil and gas producer trade group, Mexico’s rate for lost time due to injury was 14.5 times higher than the global industry average.

But that safety record hasn’t seemed to change the bank’s approach toward the company, which provided the company with $1.2bn in 2012.

Masud Hasan, environmental engineer at the Export-Import Bank, said safety is a primary concern when considering financing. “We review health and safety guidelines, spill control mechanisms, trainings – as much as physically possible.”

Caroline Scullin, the bank’s senior vice-president for communications, said it “has a solid commitment to minimizing the environmental and social impacts of projects with the application process and extending to asset monitoring throughout the life of financing”.

She added the bank’s financing of the Mexican oil company has supported 170,000 US jobs since 2009, and that 20% of the bank’s transactions have gone to small businesses.

However, it is not just the company’s safety record that is in question.

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Locals fry fish in Sánchez Magallanes to avoid the lingering taste of oil. Located on northern shore of the Lagoon del Carmen, this fishing town on Mexico’s south-western coast was once surrounded by waters containing manta rays and huachinango fish.

But drilling by Pemex has spilled oil into the waters and on to the beaches, including 12 tons in 2005, according to the Mexican government. Fishing yields dropped nearly in half in 2011, according to Sociedades Cooperativas Acuícolas del Golfo, a fishing organization.

“You would cry if you saw what was happening here,” said Magaly Marzoa, a biologist affiliated with the Technological Institute of Boca del Río, who has been documenting the impact of Pemex’s oil activity on the marine ecosystem in Sánchez Magallanes.

Common reported health issues include skin lesions, respiratory problems and high rates of cancer diagnoses, said Leonor Ramírez Bautista, an advocate at the Tabasco Human Rights Committee (Codehutab).

She said funds to conduct an official epidemiological study are scarce. “We are looking for remediation – fining the company doesn’t do any good,” she said.

Nearby in the towns of Huimanguillo and Cárdenas, Pemex is facing a class action lawsuit for contamination. Several environmental groups – including the Mexican environmental groups Fronteras Comunes and Asociación Ecológica Santo Tomás – filed suit in 2013, charging Pemex and state regulatory bodies for contributing to and then neglecting to address 40 years of oil contamination to the soil and water.

Coconut, corn, cacao, chili and squash farmers have seen their crop yields diminish over the past decade, and acid rain has contaminated the remaining crops. Environmental groups have spent years collecting evidence on the ground as well as official government reports for contamination, remediation and compensation.

“We try to demonstrate that this is a pattern. These are not isolated acts, these are a series of acts over decades,” said Ximena Ramos, an environmental lawyer at the Mexican Center for Environmental Rights.

“The contamination originating from pipeline oil spills has not diminished with time. It continues to be the reality,” she said.

Yet documenting the extent of the oil company’s environmental damage is difficult.

Manuel Llano, a member of the Mexican Alliance against Fracking and founder of CartoCrítica, has documented more than 1,000 small- to medium-level pipeline oil spills over the past two years not explicitly disclosed by Pemex. His data comes from a database obtained from Agencia de Seguridad, Energía y Ambiente, a regulatory agency.

“In the thousands of wells that extract hydrocarbons, many have small leaks. The information about the state of upkeep to these wells is totally opaque … There is no reason for it to be that way,” he said.

Along with other environmentalists, Llano accused Pemex in 2015 of illegally conducting fracking operations in Mexico for 12 years without permits, publishing map blueprints he obtained through freedom of information requests.

“For Greenpeace, Pemex is one of the most contaminating entities in Mexico and most opaque in the way it operates,” said Miguel Soto, of Greenpeace Mexico’s toxics campaign.

On 21 April 2016, 32 workers died and more than 130 were injured at the Pajaritos vinyl chloride plant blast in Veracruz. Greenpeace Mexico ran independent tests for contamination on site and found at least 59 chemicals, including carcinogens, in soil and water samples.

These findings countered governmentclaims that there was no contamination.

“If we are not asking questions and doing scientific studies, do we not find out about it?” Soto said.

The Export-Import Bank “has requested the results/findings of Pemex’s own investigations following certain significant incidences”, said Scullin, the bank’s spokeswoman. She did not specify which incidents.

If the bank is “financing these actors, they should be careful and call out Pemex – especially for the more vulnerable communities that have been affected by the activities,” said Karen Hudlet, a researcher and representative for Business and Human Rights Resource Center, a human rights watchdog group.

•••

The bank’s charter expired in July 2015, and although Congress voted overwhelmingly to reauthorize, the Senate has refused to hold hearings for new board members. The bank has only two board members, and it needs three to approve financial transactions exceeding $10m.

But despite the bank’s crippled state, investors are hopeful for Pemex’s future.

On 21 December 2013, the Mexican government officially opened the Gulf of Mexico to privatization when its energy reform bill became law.

Foreign oil giants, such as ExxonMobil and Chevron, had the opportunity to bid on 5 December for rights to explore for oil and gas.

“Five years from now, the Mexican oil industry will be a totally different industry from what it is today,” said Adrían Lajous Vargas, former CEO of Pemex and fellow at Columbia University’s Center on Global Energy Policy.

But while the company’s financial security may be assured, safety and environmental oversight is not.

“Pemex has been self-regulating and basically autonomous for decades,” said George Baker, whose company, Energia.com, provides back-office consulting to investors in the Mexican oil industry.

But since the Deepwater Horizon disaster in 2010, there has been a renewed effort by the industry “to redefine what safety really means in offshore operations”, he said, which will only become more complicated with the energy reform, as private companies compete with Pemex for oil exploration and production.

The Energy and Environmental Reporting Project is supported by the Blanchette Hooker Rockefeller Fund, Energy Foundation, Open Society Foundations, Rockefeller Brothers Fund, Rockefeller Family Fund, Lorana Sullivan Foundation and the Tellus Mater Foundation. The funders have no involvement in or influence over the articles produced by project fellows in collaboration with Guardian US.